According to National Credit Regulator, an average of 6500 consumers apply for debt counseling on a monthly basis and more than 360,000 consumers since the inception of debt counseling. This statistics indicate that the struggle to manage debt is a problem that all too many consumers are familiar with. This point fact that there is a definite need for consumers to improve the management of their finances. When consumers find themselves in a tight financial situation, the ability to manage their debt may become all the more challenging. This dangerous tendency leads consumers into the debt-spiral which can prove difficult to break free from. This is the reason that the integral role that debt counsellor play in the alleviation of over-indebtedness is of considerable importance.
Applying for credit under the NCR
Application requirements – The Act requires that the credit provider must provide the consumer with a pre-agreement, containing the main features of the proposed agreement and a quotation of the costs, before entering into any credit agreement which is to be binding on the credit provider for 5 days. The purpose is to provide all consumers with an opportunity to shop around for the best deal, within the 5-day period.
Credit Assessment – The consumer will be required to provide detailed information to the lender. This may include a detailed statement of income and costs, a household budget and details of other credit commitments in order for the lender to assess affordability.
Consumer credit records – The Act requires the credit provider, upon entering or amending or terminating a credit agreement, to report the transaction to a credit bureau.
Records – The Act requires that credit providers keep records of all applications for credit, credit agreements and credit accounts for a prescribed time.